'neath the Buttonwood Tree

'neath the Buttonwood Tree

The Economist magazine this week held its first "Buttonwood" conference, calling together the great and the good of global finance and economics to worry further about where the world is headed. (The conference title is in reference to the buttonwood tree that served as the first New York Stock Exchange.)

The conference took place against a backdrop of still-soaring stock markets and yet more declarations that the recession is over. Even Paul Krugman is admitting to a "smidgen of optimism", as industrial production puts in an unexpected surge.

Why, then, are the comments from the Buttonwood conference so negative? Over at "Financial Armageddon", Michael Panzner posts just some of the bearish statements he heard being bandied around.

I was particularly interested by a warning from Stephen Roach, Chairman of Morgan Stanley Asia, posted on the Reuters blog:

"Roach said he worries that mid-term elections next year could bring pressure for a bi-lateral trade war with China. Unemployment will still be high and there will be populist pressure to get tough on our trading partners."

As I mentioned in a previous post, this could yet prove to be one of the thorniest issues of 2010.

Meanwhile, Bloomberg reports that Soros and Roubini also remain bearish.